A Matter of Trusts – Part 2

Welcome back class. I’m your substitute teacher for today. I hope you enjoyed A Matter of Trusts - Part 1. In Part 1 we talked about Grantor’s also known as Settlor, Creators or Trustors. In this article we will discuss the Trustee and their role. This post was inspired by the article “Why I am Not A Big Proponent of Revocable Living Trusts”and partially inspired by the song “A Matter of Trust” by Billy Joel. So let’s get into it


 The trustee is the individual or entity responsible for managing the trust assets and carrying out the directions of the grantor that are formally expressed in the trust instrument. A trustee is said to be vested with legal title to the trust assets, but must, at all times, act in the best interest of trust beneficiaries.

As such, the trustee is considered to be a fiduciary, a person who has a legal duty to act in the best interest of another as a result of holding a position of trust and confidence. Other individuals and entities considered to be fiduciaries include executors and administrators of decedent’s estates, as well as guardians of minors and incapacitated individuals.

The law imposes several duties to ensure that a fiduciary always acts in the best interests of those he is charged to protect.

Among these duties are:

1. The duty of loyalty.

2. The duty of care.

A trustee must be loyal to the beneficiaries of a trust and must make decisions that are in the best interests of the beneficiaries (and consistent with the terms of the trust) even if those decisions results in a loss to the fiduciary. Furthermore, a trustee owes a duty of care to all beneficiaries, and therefore should make decisions only after engaging in a diligent investigation of the facts and thoughtful consideration of the impact on all the beneficiaries.




That’s right, I know it is only October, but Christmas and the holiday season are just around the corner. I know we all groan when department stores and big box stores completely skip Thanksgiving in their rush to get their Christmas products on the shelf. I personally loathe when stores forget about the other holidays! However, while they might seem to be jumping the gun, they might have the right idea. If you have a lot of shopping to do, it is a good idea to start your holiday planning now so that you won’t be stuck with those post-holiday bills.


Start Saving Early Like A BOSS


The holiday season creeps up on you, and before you know it you only have a few weeks to buy gifts for all your friends and family. If you have a small family, this might not be a big deal, but most of us have spouses, parents, children, in-laws and other relatives who we like to get presents for during the holidays. The best way to avoid credit card bills after the holidays is to start saving early.


This means that you should start setting aside a little money each week (or pay period) starting in September or October. For example, when October begins, you can start setting aside a portion of your paycheck each time you get paid. You can put this extra money into your savings account or into a special account for holiday purchases. You can also buy a gift card each pay period that you can then use for holiday purchases. In the YFS household we start birthday/holiday savings on January 1st. We do this so we don't have to dump tons of money into the holiday fund in October. If you didn't start saving January 1st of this year don't fret!



A Matter of Trusts – Part 1

This post was inspired by the article “Why I am Not A Big Proponent of Revocable Living Trusts”. You didn't think I was going to blog about the Billy Joel song "A Matter of Trust" did you? I know some of you only clicked on this post for the song so with out further adieu:



Now that is over....I wanted to go into a bit of detail explaining all the parties involved in a trust and touch on a use of a dynasty trust. The three parties to a trust agreement are the grantor, the trustee, and the beneficiary.


Grantor aka Settlor, Creator, Trustor


The grantor is the person who creates and initially funds the trust. In some instances, a grantor is referred to as a settlor, trustor, or creator. These names all have the same meaning. As the individual who creates the trust arrangement, the grantor establishes the terms and conditions of the trust and determines the scope and limit of the trustee’s discretion in managing the trust assets.   In sophisticated estate planning situations, a single trust may have multiple grantors.



Multiple Reward Credit Cards vs. One Credit Card: Who Wins?

This post was written by Mike, who is the creator of Credit Card Forum.   Although I strongly disagree with YFS’s claim to fame as being the credit card king (because that’s obviously me), I will admit that we both share the same strategy – juggling a portfolio of different cards to maximize credit scores, rewards, and benefits.


But when it comes to rewards, will more cards really yield a better return? Or would you be better off taking a simpler approach, with just one or two cards? Let’s do some hypothetical card combinations to see what the results are. For these examples I will be using some of the highest reward cards on the market (many of which both myself and YFS carry!).  


Over the course of a year, your average monthly spending is the following: $500 on groceries, $200 on gas, $100 at department stores, $200 on travel, $100 on restaurants/fast food, and $1,000 on everything else.   Example One: Using a plain 1% cash back credit card for everything   All categories: @ 1% = $21   Total = $21.00   Example Two: Using one card with high rewards for everything


All Categories: @ 2% with Capital One Venture = $42   Total = $42.00   Example Three: Using just two cards   Groceries: @ 6% with AmEx Blue Cash Preferred = $30 Gas + Dept. Stores: @ 3% with AmEx Blue Cash Preferred = $9 Travel + Restaurants + Everything Else: @ 2% with Capital One Venture = $26   Total = $65.00   Example Four: Using five different cards for maximum rewards   Groceries: @ 6% with AmEx Blue Cash Preferred = $30 Gas: @ 5% with PenFed Cash Rewards = $10 Dept. Stores: @ 3% with AmEx Blue Cash Preferred = $3. Travel: @ 5% with PenFed Premium Travel Rewards = $10 Restaurants: @ 5% with Citi Forward = $5 Everything Else: @ 2% with Capital One Venture = $20   Total = $78.00  


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Teach me how to improve my finances, 

so that I can buy a home

and stop wasting my money on rent